Listen to this post

It’s been a while since I talked about layoffs on this blog. But if the whispers from employers that I’ve been getting these last few weeks are any indication, we may be entering a new cycle where cuts start to run deep.

Of course, it’s still too early to call but as an Axios newsletter noted, the “alarm bells” are popping up everywhere.

Back in 2008 — yes, I’ve been doing this blog that long — I wrote a fairly lengthy piece entitled “Layoffs, RIFs and WARN, Oh My!”. Looking back on it, much of the guidance there still holds up.

Here are three laws to keep in mind when considering layoffs or reductions in force.

WARN – First, the WARN Act is sure to apply if you’re laying off a significant number of employees. I’ve covered the specifics in a prior post here, but not all employers are covered. Employers who have 100 or more full-time employees are covered (and some additional employers too — talk with your counsel.)

There are two types of events that are covered by WARN — plant closings and mass layoffs. “Employment Losses” within each of them triggers some notice requirements. All of these terms have a definition though.

The key part of the law is that a WARN notice must be given to each employee at least 60 days before a plant closing or mass layoff. However, if there is a union, the notice must be given to the union representative of the affected employees. In Connecticut, notice must also be provided to the Connecticut dislocated worker unit and the chief elected official of the local government where the closing or layoff is occurring.

OWBPA – The Older Workers Benefit Protection Act is another law that will likely apply if you are providing separation agreements to laid-off employees. The law applies to employers with 20 or more employees.

The OWBPA applies to any separation agreement with employees who are over 40 years old. I’ve covered the types of things that are requierd by the law (including that the separation agreement be written in plain Englash and that the employee must be advised to consult with an attorney) but there are two added requirements in instances of a reduction in force.

If the termination is part of a reduction in force or voluntary program that affects two or more employees, affected employees (over the age of 40) must be given at least 45 days to consider the agreement and given a “release attachment” that has a list of those selected for the program (or termination) and those who are not.

Disparate Impact – Lastly, employers should be mindful that mass layoffs open the door to disparate impact claims. These types of claims arise when an employer implements a supposedly neutral policy or procedure, but the impact of that policy may affect a protected group at a rate higher (by a statistical significance) than a majority group.

One of the best ways to address this is to perform an analysis before the proposed reduction. Indeed, there is an entire profession of statistical experts available to help you figure out if the proposed layoff may have a disparate impact on a protected class of workers. Working with an attorney as well can help ensure that such analyses are protected by the attorney-client privilege.

Obviously there’s a lot of other laws that need to be considered too. These types of employment decisions are among the most difficult that employers have to make because small slipups can lead to lawsuits on a class-wide basis.